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Argument: Public insurance can lead in quality improvements and innovations

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Supporting quotations

Jacob Hacker. "The case for public plan". The Institute for America's Future: "A PUBLIC PLAN CAN SPEARHEAD QUALITY IMPROVEMENTS. It is widely recognized that major efforts are needed to improve the quality and cost-effectiveness of medical care. No sector of American health care is immune from responsibility for these problems, or exempt from the challenge of fixing them. Yet Medicare has been a leader in trying to reform the system, and in partnership with a new public plan for nonelderly Americans, it could lead the way in spearheading quality improvements in both the public and private sectors. The Surprising Success Story of the VHA

Perhaps the most powerful example of how investments in quality improvement by a public plan can pay off is provided by the Veterans Health Administration. The VHA has used its integrated framework to create a model evidence-based quality-improvement program that delivers the highest quality care in the nation, as measured by adherence to established treatment protocols. In the rest of American health care, only around half of adults and children receive the care they should. The share in the VHA is over two thirds.

How does the VHA do it? Beginning in the early 1990s, VHA leadership instituted both a sophisticated electronic medical record system and a quality measurement approach that holds regional managers accountable for several processes in preventive care and in the management of common chronic conditions. Other changes include a system-wide commitment to quality improvement principles and a partnership between researchers and managers for quality improvement.55

The VHA’s promulgation of specific performance measures and emphasis on accountability—possible only because of the broad reach of its coverage—appear to be the heart of its success. The use of computerized reminders and electronic records; the emphasis on standing orders, improved inter-provider communication, facility performance profiling, leveraging of academic affiliations, and accountability of regional managers for performance; and the creation of a more coordinated delivery system—in tandem, these reforms have allowed the VHA to create and uphold high standards of quality.56 Medicare’s Improving Quality Record

The Medicare program is not, of course, the VHA, and some of the lessons provided by the VHA integrated system are not applicable to an insurance program like Medicare. Yet key elements of the VHA strategy—notably, greater emphasis on research-based coverage decisions, improved use of information technology, and increased stress on performance measures and accountability—could be effectively used in Medicare and a new public plan for the nonelderly, and indeed it is unclear how they could be developed without such a coordinated public-sector effort.

Medicare already shows unique quality advantages over private insurance when it comes to reliable patient access to affordable care—advantages that would carry over to a new public plan for the nonelderly. Elderly Americans with Medicare report that they have greater access to physicians for routine care and in cases of injury or illness than do the privately insured.57 They are also half as likely as nonelderly Americans with employment-based insurance to report common access problems, such as skipping a medical test, treatment, or follow up, and failing to see a doctor when sick.58

Over the last two decades, moreover, Medicare has increasingly emphasized improved payment methods and rigorous reviews of technology and treatment, and it has made increasing investments in quality monitoring and improvement. Revealingly, private plans generally use the public Medicare plan’s criteria for covering treatments as their standard of medical necessity, and they have adopted many of Medicare’s innovations in payment methods. As Robert Berenson and Bryan Dowd note in a recent Health Affairs article, “Traditional Medicare has been the source of important payment innovations, moving many payment systems away from fee-for-service to prospective payment, such as the diagnosis-related group (DRG) prospective payment system (PPS) for inpatient services. The resource-based relative value scale (RBRVS) for physician fees, despite its flaws, has been adopted widely by private plans . . . . Commercial insurers also look to Medicare to make initial technology approval decisions and to initiate more-aggressive payment denials—for example, for ‘never’ events and medically ineffective treatments.”


Tom Daschle. "A public plan will reduce costs and improve access". Newsweek. May 2, 2009: "You head home by explaining that a public plan is much more likely to be innovative. Expect it to follow the VA model, with the rapid incorporation of health-information technology and electronic medical records. Expect it to employ best practices— and put as much emphasis on wellness as it does illness."

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